As of 2nd January 2022, issuing a cheque that bounces is no longer a criminal offence in the United Arab Emirates. However, it could still affect your credit score and impact your ability to secure lines of credit, according to the Al Etihad Credit Bureau. Marwan Ahmed Lutfi, the Chief Executive Officer of Al Etihad Credit Bureau clarified that several factors are involved in the computation of one’s credit score, including payment of utility bills, credit card payments and bank loan installments.
Marwan Ahmed Lutfi elaborated that the Al Etihad Credit Bureau had a database of 13million individuals as well as companies, in addition to 24 million creditfacilities extended. 17 million bank accounts are in the database, which is linked to Image Cheque Clearing System data from the Central Bank of the UnitedArab Emirates. The database is shared not only with banks, but also telecom and internet service providers like du, the courts, and utilities providers likewater and electricity companies.
About95% of those who request their credit score do so through the Al Etihad Credit Bureau’s website or app, which has 250,000 users. Marwan Ahmed Lutfi asks everyone to check their credit score once every year. Sometimes, data is wrongly fed into the system or misreported. In some cases, people forget to close their credit cards and the credit extended by the credit card company stays on, racking up user fees. This can also affect one’s credit score, severely affecting the chances of securing credit.
Becausea lot of banks and financial institutions have access to the Al Etihad Credit Bureau database, it gives them the ability to make instant decisions when someone applies for credit. For instance, someone with a credit score of 300 is likely to have issued multiple cheques that bounced when presented, or missed payments for more than 90 days. According to Marwan Ahmed Lutfi, this is ano-go area for any lender, and such an individual or company is unlikely to be offered any line of credit.
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